U.S. President-elect Barack Obama said on Saturday that he was crafting an aggressive, two-year stimulus plan to revive the troubled economy, warning that swift action was needed to prevent a deep slump and a spiral of falling prices.
"If we don't act swiftly and boldly, most experts now believe that we could lose millions of jobs next year," Obama said in prepared remarks for the weekly Democratic radio and video address.
"We now risk falling into a deflationary spiral that could increase our massive debt even further," he said.
A day after U.S. stock markets rallied on his apparent choice of Timothy Geithner as Treasury secretary, Obama gave a bleak assessment of the economy in his most detailed comments on the subject since winning the Nov. 4 election.
Obama in October called for a $175 billion stimulus measure, but his comments in the radio address on Saturday signaled he was prepared to push for a much larger package, though he did not give a price-tag.
The economic recovery plan being developed by his staff aims to create 2.5 million jobs by January 2011, and he wants to get it through Congress quickly and sign it soon after taking office.
He called the plan "big enough to meet the challenges we face" and said that it will jump-start job creation but also "lay the foundation for a strong and growing economy."
The proposal for a two-year stimulus plan further indicated a sizable effort. Most such plans are aimed at covering a one-year period.
The number of Americans on the unemployment rolls surged to the highest level in 16 years, up more than 540,000, the Labor Department said on Thursday.
'Ignored for far too long'
Obama said his plan would rebuild roads and bridges and modernize schools while developing alternative energy sources and more efficient cars.
"These aren't just steps to pull ourselves out of this immediate crisis; these are the long-term investments in our economic future that have been ignored for far too long," Obama said.
A trio of crises — housing, credit and financial — have badly damaged the economy, and financial analysts have projected the country's economic hardships will continue through much of 2009.
Obama acknowledged Saturday that evidence is growing the country is "facing an economic crisis of historic proportions." He noted turmoil on Wall Street, a decrease in new home purchases, growing jobless claims and the menacing problem of deflation.
He said he was pleased Congress passed an extension of unemployment benefits this week, but added, "We must do more to put people back to work and get our economy moving again."
He cautioned, "There are no quick or easy fixes to this crisis, which has been many years in the making, and it's likely to get worse before it gets better." But Obama said Inauguration Day, Jan. 20, "is our chance to begin anew."
Obama said getting congressional approval for his broad economic plan will not be easy.
"I will need and seek support from Republicans and Democrats, and I'll be welcome to ideas and suggestions from both sides of the aisle," he said. "But what is not negotiable is the need for immediate action."
Across the country, Americans "are lying awake at night wondering if next week's paycheck will cover next month's bills," people are showing up at work to clear out their desks and retirees are watching their life savings disappear, Obama said.
Senate majority leader Harry Reid said congressional Democrats will "continue pushing for aggressive but necessary measures" to improve the economy. He said part of that included passing a substantial recovery package like Obama's.
Concluding his radio message, Obama said in this country's darkest hours, the American people have risen above their divisions to solve their problems.
"We have acted boldly, bravely, and above all, together," Obama said. "That is the chance our new beginning now offers us, and that is the challenge we must rise to in the days to come. It is time to act. As the next president of the United States, I will."